Nobel Memorial Prize in Economic Sciences

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel[2][3][4] (Swedish: Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economic prize administered by the Nobel Foundation and generally regarded as the Nobel award of Economics. The prize was established in 1968 by a donation from Sweden's central bank Sveriges Riksbank to the Nobel Foundation to commemorate the bank's 300th anniversary.[5][6][7][8] As it is not one of the prizes that Alfred Nobel established in his will in 1895, it is not a Nobel Prize.[9] However, it is administered and referred to along with the Nobel Prizes by the Nobel Foundation.[10] Laureates are announced with the Nobel Prize laureates, and receive the award at the same ceremony.[5]

An endowment "in perpetuity" from Sveriges Riksbank pays the Nobel Foundation's administrative expenses associated with the prize and funds the monetary component of the award.[11]

Since 2012, the monetary portion of the Prize in Economics has totaled 8 million Swedish kronor. This is equivalent to the amount given for the original Nobel Prizes.[15][16][17] Since 2006, Sveriges Riksbank has given the Nobel Foundation an annual grant of 6.5 million Swedish kronor (in January 2008, approx. US$1 million; €0.7 million) for its administrative expenses associated with the prize as well as 1 million Swedish kronor (until the end of 2008) to include information about the prize on the Nobel Foundation's web site.[18]

The Prize in Economics is not one of the Nobel Prizes which were endowed by Alfred Nobel in his will.[5][19][20] However, the nomination process, selection criteria, and awards presentation of the Prize in Economic Sciences are performed in a manner similar to that of the original Nobel Prizes.[11][16][21]

Laureates are announced with the Nobel Prize laureates, and receive the award at the same ceremony.[5] The Royal Swedish Academy of Sciences awards the prize "in accordance with the rules governing the award of the Nobel Prizes instituted through his [Alfred Nobel's] will",[11] which stipulate that the prize be awarded annually to "those who ... shall have conferred the greatest benefit on mankind".[22]

According to its official website, the Royal Swedish Academy of Sciences "administers a researcher exchange with academies in other countries and publishes six scientific journals. Every year the Academy awards the Nobel Prizes in Physics and in Chemistry, the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, the Crafoord Prize and a number of other large prizes".[12]

Each September the Academy's Economics Prize Committee, which consists of five elected members, "sends invitations to thousands of scientists, members of academies and university professors in numerous countries, asking them to nominate candidates for the Prize in Economics for the coming year. Members of the Academy and former laureates are also authorised to nominate candidates."[11][12][23] All proposals and their supporting evidence must be received before February 1.[20] The proposals are reviewed by the Prize Committee and specially appointed experts. Before the end of September, the committee chooses potential laureates. If there is a tie, the chairman of the committee casts the deciding vote. Members of the Royal Swedish Academy of Sciences vote in mid-October to determine the next laureate or laureates of the Prize in Economics.[11][12][24] As with the Nobel Prizes, no more than three people can share the prize for a given year; they must still be living at the time of the Prize announcement in October; and information about Prize nominations cannot be disclosed publicly for 50 years.[20]

In February 1995, following acrimony within the selection committee pertaining to the awarding of the 1994 Prize in Economics to John Forbes Nash, the Prize in Economics was redefined as a prize in social sciences. This made it available to researchers in such topics as political science, psychology, and sociology.[28][29] Moreover, the composition of the Economics Prize Committee changed to include two non-economists. This has not been confirmed by the Economics Prize Committee. The members of the 2007 Economics Prize Committee are still dominated by economists, as the secretary and four of the five members are professors of economics.[30] In 1978, Herbert A. Simon, whose PhD was in political science, became the first non-economist to win the prize,[citation needed] while Daniel Kahneman, a professor of psychology and public affairs at Princeton University is the first non-economist by profession to win the prize.

Some critics argue that the prestige of the Prize in Economics derives in part from its association with the Nobel Prizes, an association that has often been a source of controversy. Among them is the Swedish human rights lawyer Peter Nobel, a great-grandnephew of Ludvig Nobel.[31] Nobel accuses the awarding institution of misusing his family's name, and states that no member of the Nobel family has ever had the intention of establishing a prize in economics.[32] He explained that "Nobel despised people who cared more about profits than society's well-being", saying that "There is nothing to indicate that he would have wanted such a prize", and that the association with the Nobel prizes is "a PR coup by economists to improve their reputation".[31]

In his speech at the 1974 Nobel Prize banquet, Friedrich Hayek stated that had he been consulted on the establishment of a Nobel Prize in economics, he would "have decidedly advised against it"[29][34] primarily because, "The Nobel Prize confers on an individual an authority which in economics no man ought to possess.... This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally."[34]

Milton Friedman was awarded the 1976 prize in part for his work on monetarism. Awarding the prize to Friedman caused international protests.[37] Friedman was accused of supporting the military dictatorship in Chile because of the relation of economists of the University of Chicago to Pinochet, and a controversial six-day trip[38] he took to Chile during March 1975 (less than two years after the coup that deposed President Salvador Allende). Friedman himself answered that he never was an adviser to the dictatorship, but only gave some lectures and seminars on inflation and met with officials, including Augusto Pinochet, in Chile.[39]

The 1994 prize to John Forbes Nash caused controversy within the selection committee because of Nash's history of mental illness and alleged anti-Semitism.[42][43] The controversy resulted in a change to the rules governing the committee during 1994: Prize Committee members are now limited to serve for three years.[28]

The 2005 prize to Robert Aumann was criticized by European press[44] for his alleged use of game theory to justify his stance against the dismantling of Israeli settlements in occupied territories.

The award's official Swedish name is Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne. The Nobel Foundation's translations of the Swedish name into English have varied since 1969:

Years

English translations

1969–1970

Prize in Economic Science dedicated to the memory of Alfred Nobel[45][46]

^"The Nobel Prize". The Nobel Foundation. Archived from the original on 4 April 2006. Retrieved 7 November 2007. In 1968, Sveriges Riksbank established The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, founder of the Nobel Prize.